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Certificates of Insurance, Part 2.Last week’s blog covered the reason certificates cause so many E&O mistakes due to processing errors. This week’s blog covers the second reason certificates of insurance create so many E&O errors. That reason is agencies are cheating or naively making huge mistakes in order to please their customers.

I am not an attorney and while I have heard attorneys advise that certificates of insurance do not change coverage and while the disclaimer on the certificate may advise that certificates of insurance do not change coverage, I would hate to be the one testifying to a jury that just because a certificate holder received a certificate that said coverage existed, they really should have asked for a copy of the entire policy since obviously, the disclaimer on the certificate advising the certificate did not change coverage was more important than the body of the certificate.

A significant case, Brown and Brown of Texas, Inc. v. Omni Metals, Texas Appeals Court, 2009, resulted in the court finding that certificate language overrides policy language and makes the standard disclaimer moot (at least per my layman’s understanding of the case). So the next time your client advises the certificate “just has to state…,” think about your A. M. Best rating because you just may become the insurer. Then think about your surplus because your E&O policy just may exclude intentional acts and advising a certificate holder that coverage exists when it does not may just qualify as an intentional act.